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rsmiller510 writes "After all of the hype, it was surprising how much The Daily, the new News Corp. iPad daily newspaper, looks like a conventional news magazine. Ultimately, though, it's an old model in a new package and as such will fail."

Unfortunately for News Corp, as VentureBeat reports, it's already invested an astonishing $30 million just to launch this thing, and it will cost another $500,000 a week to keep it going. While Murdoch says the right things about taking the presses and the trucks out of the equation to produce a leaner operation, I'm left wondering how many subscribers and advertisers it will take to make the initial investment back, never mind make it profitable -- especially with Apple taking half of the subscription revenues.

News Corp has a quarterly revenue of around 8 billion dollars [google.com] but their net income has been steadily declining (duh). To risk a one time cost of thirty million followed by a weekly liability of half a million to save that hemorrhaging is a bit of non issue in my opinion. I think Murdoch could give up one of his twenty yachts and reduce his yacht insurance to offset that if he wanted to pay for The Daily out of pocket.

The Apple comment further mystifies me. While terrible that they should lose so much money to Apple, it does give Apple incentive to see this succeed since it's designed for their product. So consider first how amazing Apple is at promoting products and how terribly backward News Corp has been as of late. It might turn out to be a paltry sum to have Apple selling their product with interest of seeing it succeed.

Regardless, if I've learned one thing from Microsoft and their initial XBox and Zune attempts, it's that a very very wealthy company that wants to shove something down the consumer's maw will not let up until it has turned a profit. The problem is that News Corp has what, eight billion sitting around in cash? Let the blood letting begin with this pin prick!

The argument seems to be that people want a proliferation of new sources. Yes I'm sure that's why fox news and CNN and MS nbc all are watched by the same people eager for a proliferation of points of view. Or why readers of Huffpo also hang on the words of powerline blog and littel green footballs. Or how the readers of Hagee and the middle easter armageddonist news sources are widely read in the Slashdot crowd.

People do not channle surf these days. they find a few news aggregators they like, say huffpo, boingboing, andrew sullivan, fark nad slashdot, and then they follow the links one deep from there. But it's the aggregators that they come back too. A well constructued newsmag stands a chance. But if it is no more than the New york times or newsweek then it will also have plenty of competition.

I don't have an opinion about whether The Daily is going to make it or not. I've spent maybe 15 minutes looking at it so far (yesterday), and I'm going to give it more of a chance over the next couple of weeks while it's free. My initial thoughts weren't especially positive, but it's the content, not the business model, that didn't impress me. The content looked OK and was arranged decently, but I wasn't especially interested in most of what I saw. I didn't see that it was anything unique that I couldn't find anywhere else. If it continues to feel generic, it's going to die.
However, if it dies, it's not going to be because people won't spend $1 a week on it. If content is unique and interesting, I'll easily pony up money for a week of it that's less than the cost of a soft drink these days. Some people won't pay anything, ever, for content. But I think that's shortsighted. SOMEONE has to be paid to produce content. It doesn't just magically appear from the Content Fairy. Just as people have to be paid if you want your grass cut or your hair cut or your plumbing fixed, you have to pay the people who produce content. I don't know what the best model is for paying those people, but the idea that you can forever get content for free isn't logical or reasonable. Content companies are losing money by giving away their material on the web. That is NOT going to continue forever. Anybody who understands business understand it you can't invest massive amounts of money into something not producing a return, especially while your traditional lines of business dry up.
Those of us on the web have gotten a free product for years because we've been subsidized by the people who pay for printed and televised versions of the content. That subsidy won't last forever. SOMEONE has to find a way to get content producers paid. To simply declare that the future model is free is shortsighted and is a misunderstanding of what's happened on the web so far.